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Battery energy storage market to grow 23% per annum by 2030

As national energy and decarbonisation plans drive the demand for energy storage, the global grid battery energy storage market is expected to have a compound annual growth rate of 23% by 2030. This is according to a new study released by research firm Frost & Sullivan.

Annual power capacity is expected to reach 19.3GW from 8.5GW in 2020, resulting in 134.6GW/437.4GWh of cumulated capacity by 2030.

This rising demand for storage is expected to increase annual market revenue from $2 billion in 2020 to approximately $16 billion by 2030.

The expansion of renewable energy and continued decline in the costs of battery energy storage systems are expected to put the technology at the forefront of national energy plans, according to the study.

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There continue to be countries setting goals to generate 50% of their total energy from renewables by 2030. The renewable energy plants will need to be integrated with battery energy storage systems to allow the storage of excess energy during times when generation is high for dispatching during times when generation is low and demand high.

In 2020, the market was resilient to COVID-19, with installations expanding by 47.3% or 2.4GW.

Growth opportunities are expected for companies who:

  • Integrate solar PV with battery energy storage. The US is expected to lead in this segment as the cost for solar PV and batteries continues to decline and owing to the availability of regulations permitting hybrids in wholesale electricity markets.
  • Co-locate battery storage with thermal power plants. Hybridisation of conventional power plants, and even hydropower plants, with storage, is an emerging and attractive niche.
  • Adjust storage to leverage evolving regulation and market conditions: Product and systems design should be focused on scalable configurations that can be easily augmented in size and energy to power ratio and combined and aggregated behind a single power control system to serve future potential applications with minimum disruption.
  • Leverage emerging digital technologies to optimise battery and plant performance. Powerful software combined with artificial intelligence, machine learning, and advanced price forecasting is vital for storage owners’ and operators’ merchant strategy success.

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Maria Benintende, Energy & Environment Research Analyst at Frost & Sullivan, said: “With climate change and environmental sustainability at the center of national agendas, battery storage systems deployment is crucial to support the transition to higher levels of clean electrification relying primarily on variable renewable energy sources.

“Additionally, the increasing power demand and generation assets distant from consumption centers necessitate transmission grid reinforcement and optimisation. Batteries offer an attractive option in handling the evolving electrification issues, sparing massive investments in new transmission grids.

“Asia — led by China — and North America — led by the US — are anticipated to be the leading regions, accounting for 46.2% and 32.4%, respectively, of the total grid battery storage power capacity by 2030. Opportunities in Latin America, Africa, and the Middle East will remain limited, pending further cost reductions and modernisation of market designs. Europe’s participation is likely to fall from 25.6% in 2020 to 13.3% by 2030 because of the saturation of frequency regulation markets and the lack of a business case for other applications.”

Find out more about the Electricity Market Modernisation and Cost Reductions Powering the Global Grid Battery Energy Storage Market

Nomvuyo Tena
Nomvuyo Tena is a Content Producer at Clarion Events Africa and is as passionate about the energy transition in Africa as she is about music and Beyonce.